PEO Trends: Consolidation, New Markets

Florida is one of the strongest markets for PEOs, which still see a lot of potential for growth statewide.

| 2/1/2011

CEO PROFILES - PEOs in Florida

Burton GoldfieldCEO - TriNet
Bradenton (Florida office)

Burton Goldfield [Photo: TriNet]

TriNet entered Florida in June 2009 when it purchased Bradenton-based competitor Gevity for $98 million. The deal gave TriNet a risk-management operation, an East Coast presence and relationships with insurance companies that it had been lacking. Today, TriNet has more than 7,000 small-business clients, with more than 100,000 employees and more than $200 million in revenue, making it one of the nation's largest PEOs. It kept Gevity's former headquarters building in Bradenton. More employees work there in the company's payroll processing center than at TriNet's other two main centers in the San Francisco area and Reno, Nev.

TriNet's got its start 22 years ago servicing the high-tech industry in California. Like most PEOs, TriNet earns a monthly fee for each employee that it manages for a customer. In the co-employment arrangement, both the PEO and the worksite employer have mutual liability for employees. CEO Burton Goldfield says the arrangement gives it a unique relationship with the customer. "No other industry has the same level of intimacy with the customer. If an employee has a problem, the PEO gets sued along with employer." The PEO also has another risk: "If a member goes out of business, we have to come up with the payroll."

Mark Perlberg, CEOCEO - Oasis Outsourcing
West Palm Beach

Mark Perlberg, CEO of Oasis Outsourcing, is known for keeping up on the latest laws that affect employers and employees. His clients look to outsource their human resources functions and typically want to know how to prepare for healthcare reform or comply with workers' compensation laws.

Wackenhut Corp. formed Oasis in 1996 and spun it off in 2003 to management and a private equity firm. "They brought me in to run the business," says Perlberg, who has held his post for seven years. "It was not a distressed situation. The business was profitable, and it has been my task to take the business to next level."

Today, the company has more than 3,000 clients with a reach well beyond Florida. The types of service its customers buy differ with smaller companies most interested in human resources support, affordable workers' comp and employee benefits and larger businesses using the PEO for training and development, compliance issues and strategy and organizational development.

Going forward, Oasis is working to expand its products and services. "There is a lot more opportunity in front of us," Perlberg says.

Mark LettelleirCEO - Modern Business Associates
St. Petersburg

"Our clients can call in with a question about a discrimination filing or wage-and-hour concern and not be billed at
$400 an hour by an outside attorney."

— Mark Lettelleir [Photo: Mark Wemple]

In 1997, when Florida's economy was booming, Mark Lettelleir saw an opportunity to sell small businesses HR-related services on an outsourced basis. His partners, Jack and Jay Rice, were running an independent insurance agency and saw opportunity, too. The three were convinced that professional employer organizations had potential and founded Modern Business Associates in St. Petersburg.

While the recession hit small businesses hard in Florida, it has had a mixed effect on PEOs such as Modern Business Associates. Lettelleir says some clients have downsized; others have closed their doors. But at the same time, companies that could no longer afford an HR manager or payroll department outsourced those functions. Modern Business Associates provides services to about 30,000 employees at customers' workplaces. "We can go to insurance carriers and providers and say, ‘We have 30,000 employees. What discounts can you provide us?' Then we can pass those savings on to our clients."

Modern Business Associates has four main services: Payroll; workers' compensation policies and procedures; benefits such as health insurance and 401(k)s; and management of compliance with federal regulations. Lettelleir says his PEO has eight labor attorneys on staff, which has proven a huge advantage to its customers.

"Our clients can call in with a question about a discrimination filing or wage-and-hour concern and not be billed at $400 an hour by an outside attorney."